Suzuki enhances its stake in Maruti

Suzuki Motors has enhanced its stake in its subsidiary Maruti Suzuki to 55 percent. The move of raising its stake in Maruti Suzuki has ignited some speculations in the Auto market in India about intentions of Suzuki to take full control of Maruti Suzuki in coming years. Suzuki Motors increased its stake in Maruti Suzuki by 0.8% through secondary market purchases. According to Indian rules of acquisitions Suzuki has to make an open offer for another 20% if it raises its stake to more than 55%.

Maruti Suzuki is the largest car manufacturer in India and it sells every second car here with around 54% market share in the country. Maruti contributes around 80 percent of the profits earned by Suzuki Motors. Maruti India sold 96,650 cars in the month of February which accounted for a 22 percent increase as compared to the same period of last year.

FII and LIC are the other big stake holders in Maruti, where the FII owns a stake of 22.21 percent in the company, the LIC owns a 11.22% stake in it. The current market value of Maruti is about $10 billion. Besides this Maruti is planning to enhance its manufacturing capacity to 1.5-1.75 million vehicles per annum in coming years.